Medicinal marijuana sales: Could they dwarf Viagra?

The legalization of medicinal marijuana remains a hotly-debated issue in American politics - and a new study shows that the controversial industry has the potential to be an enormously profitable one.

According to a report by the independent financial firm See Change Strategy LLC, the market for medicinal marijuana is already $1.7 billion a year - rivaling the sales figures for Viagra - despite being legally available to buy in stores in only seven American states.

"We predict that the current markets will double in the next five years," Ted Rose, editor of the report, said in a conference call on Wednesday. Citing increased patient access and regulatory clarity, Rose predicts massive growth in the five several years, with an estimated market value of $8.9 billion. (Viagra's market value stands at roughly $1.9 billion, according to the report.)

"Hundreds of businesses exist around the country that cultivate and sell marijuana to customers," he added in a statement. "Many of these businesses emerged in the wake of the Obama administration's decision to deprioritize federal prosecutions of individuals and business complying with state medical marijuana laws. The State of the Medical Marijuana Markets 2011 shows which states represent the most active markets, who is making money, and how are they doing it."

Currently, the growth and distribution of medicinal marijuana is legal in seven states - California, Colorado, Michigan, Montana, Oregon, Washington, and New Mexico - and it is slated to become legal in four more (plus the District of Columbia) later this year. According to the report, one in four Americans currently live in a medicinal marijuana market, and 24.8 million people are currently eligible to purchase medicinal marijuana legally. About 730,000 people take advantage of that eligibility, the report says.

Rose said business owners in the industry list regulations and securing financing - rather than competition and/or law enforcement - as their main concerns. Ninety percent, he said, feel their market is growing.

"We're witnessing the beginnings of a legal business ecosystem around marijuana," Rose said on the conference call.

Rose said See Change decided to undertake the study because he had observed that most of the existing research in the field was either "personal, anecdotal, or polemic " - and that there was little hard information on the industry's potential market value.

"Everyone benefits from realizing how big this market really is," he said.

The study, which was conducted over the course of eight months, gathered data from approximately 300 businesses involved in the growth and/or distribution of medicinal marijuana through a series of surveys and interviews.